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Trademark/IP

February 25, 2015

On February 13, 2015, Yelp, Inc. filed a lawsuit in the Northern District of California against three companies offering to “game” Yelp’s review system by creating and posting bogus positive reviews on Yelp’s website. Among other things, Yelp alleges that these companies are infringing Yelp’s trademarks by using them to promote fake review services. This claim illustrates a tension in the trademark law between what constitutes fair use and what constitutes infringement.

The user employs only so much of the mark as is necessary to identify the service; and

The user does nothing to suggest sponsorship by or affiliation with the mark holder.

The Ninth Circuit has referred to these sorts of uses as “nominative fair use.”

As a practical matter, nominative fair use arises in numerous common situations, including where a news entity refers to a service or product by its trademark -- as was the case in New Kids -- or where a competitor identifies a competing product as a part of a comparative advertisement. Indeed, such use of a competitor’s mark is promoted by the Federal Trade Commission.

An analytically similar rule allows manufacturers of replacement parts or compatible products and services to identify their product or services’ compatibility by reference to a third party’s trademark. As is the case with nominative fair use, however, any such compatibility claim must be sure to avoid the suggestion the compatible product or service is sponsored or approved by the mark holder.

Yelp alleges that the actions of the fake review companies go well beyond what is allowed by these trademark doctrines. Yelp’s complaint alleges that defendants’ advertisements and social media pages include Yelp’s word and design marks in prominent locations, creating the likelihood that consumers will be confused as to Yelp’s affiliation with these fake review companies. Yelp also alleges evidence of actual consumer confusion --in this case, Yelp customers calling Yelp to complain about the fake review companies’ advertisements.

As of this writing, the case has been assigned to Magistrate Judge Paul Singh Grewal.

January 31, 2014

Whether you are a Broncos fan or a Seahawks fan, you have to root against the trademark and copyright counterfeiters who have had a field day copying Super Bowl merchandise this year. Fortunately, once again, the government has stepped in to stem the tide of these knock-offs.

Officials announced on January 30, 2014 that federal law enforcement agents had seized $21.6 million in counterfeit Super Bowl tickets and merchandise. Most of the goods were seized as they arrived at US ports. The seizures were a culmination of a seven-month investigation by US Immigration and Customs Enforcement in cooperation with various other federal agencies. Law enforcement agents also seized control of 163 websites engaged in the sale of the counterfeit items, shutting down the sales of counterfeit goods on these sites. Now, Internet visitors will be greeted with a notice explaining that the goods on those sites are no longer available. The website seizures occurred as part of “Operation in Our Sites,” an ongoing initiative launched in 2010 by the National Intellectual Property Rights Coordination Center to target counterfeiting and piracy on the Internet.

This year’s seizure of goods continues an upward trend over the past several years in which various agencies, including US Immigration and Customs Enforcement and US Customs and Border Protection, have been working with the National Football League to curb the sale of counterfeit Super Bowl merchandise. In 2013, $13.6 million in counterfeit merchandise was seized; in 2012 the total was $4.8 million.

Officials have also made 50 arrests in connection with the counterfeit goods seizures. The criminal penalties for counterfeiting may be stiff: Under 18 U.S.C. § 2320, an individual convicted of a first offense of trafficking in counterfeit goods may serve up to ten years in prison, be fined up to $2,000,000, or both. In addition, counterfeiters may face additional criminal sanctions under the federal Copyright Act, 17 U.S.C. § 506.

In addition to criminal sanctions, the trademark and copyright laws also provide remedies for intellectual property owners whose goods are counterfeited. The federal Trademark Act authorizes seizures of counterfeit goods in civil cases. The monetary recovery may be significant -- up to $2 million per counterfeit mark for each type of product counterfeited if the counterfeiting is willful. The Copyright Act adopts the provision of the Trademark Act that provides for the seizure of counterfeit goods. The Copyright Act also provides copyright owners with a choice between recovering actual damages and profits or statutory damages ranging from $750 to $30,000 per copyrighted work.

So when you buy that prized Super Bowl jersey, thank the federal agents who are ensuring that you purchase the “real thing”.

April 15, 2013

As early as April 23, 2013, the Internet Corporation for Assigned
Names and Numbers, better known as ICANN, may launch the long-awaited first set
of new top level domain names, or gTLDs, which are the combinations of letters
that appear to the right of the “dot” in an internet domain name. This
means that rather than the options for domain names being limited to “.com,”
“.net,” “.org,” and a handful of other gTLDs, there could soon be hundreds or
even thousands of gTLDs available. (This blog has previously discussed the new gTLDs here, here,
here,
and here.) The implementation of these new gTLDs may cause
concern for trademark owners that wish to protect their marks. While a company
may have registered its brand domain name in the “.com” or “.net” gTLDs (for
example, brandname.com) a long time ago, to protect its mark in the domain name
space, it must now be on the lookout for the registration of a domain name
consisting of its trademark and new
gTLD

ICANN has launched a Trademark Clearinghouse to help trademark
owners protect their trademarks. A trademark owner who submits its registered
trademark to the Trademark Clearinghouse via ICANN’s website will be provided
with two useful services. The first of these services, called the “Sunrise
Service,” gives trademark owners a head start by allowing them to register
domain names incorporating their trademarks and a new gTLD before anyone else.
The second service, the “Trademark Claims Service,” notifies a third party if
it is registering a domain name in which the letters to the left of the “dot”
are identical to a trademark recorded in the Trademark
Clearinghouse. Although the Trademark Claims Service does not block a
third party from registering a domain name that incorporates a trademark, it
places potential infringers on notice that their domain name does include a
trademark. The owner of the trademark
recorded in the Clearinghouse is then notified of the potentially infringing
domain name.

Trademark owners may now submit their trademarks to the Trademark
Clearinghouse, which opened its doors on March 26, 2013. The fees for
submission are $150 per mark for one year, $435 per mark for three years, and
$725 per mark for five years. A trademark owner must prove that it owns a
mark by submitting evidence such as a trademark registration, a judicial
decision demonstrating court-validation, or other evidence that the mark
constitutes that owner’s intellectual property. In order to be recorded
in the Clearinghouse, a mark must be a word mark or, in the case of design
marks, the textual element of the mark must be “predominate” and “clearly separable
or distinguishable” from the non-textual elements.

More details about ICANN’s Trademark Clearinghouse are
available in a recent Arnold & Porter advisory, available here.

September 24, 2012

That’s
what consumers may be saying lately about the domestic goddess Martha Stewart,
renowned chef Emeril Lagasse, and television retailer Home Shopping Network
(HSN). The trio is the object of a
lawsuit filed by a German trade association, “Wuppertal-Solingen-Remscheid” in US District Court for the Southern District of
Florida. The Chamber claims that Martha,
Emeril, and HSN have engaged in trademark counterfeiting and unfair competition
by advertising, promoting and selling counterfeit knives displaying the
Chamber’s federally registered mark, Solingen®.

According
to the complaint, the SOLINGEN® mark was first used approximately
150 years ago. SOLINGEN® is a
registered mark in the United States, which certifies not only geographic
origin of the cutlery for which it is used, but also that the cutlery comports
with statutory standards of high quality manufacture. To put a “finer point” on it, SOLINGEN®
knives are even protected by the “Solingen Decree”, a German law prohibiting
anyone selling cutlery not made in
Solingen, Germany, but implying that it is.

“Cutting
to the quick”, the Complaint alleges that Defendants distribute counterfeit
cutlery marked “SOLINGEN” that is made in China, and that they even overtly say
so. Picture this: The Chamber has claimed not only that the
Defendants have created a likelihood of consumer confusion as to the source of
their knives, but that they also cause dilute the Chamber’s rights by
“tarnishment.” The Complaint cites
examples of consumers stating that the knives at issue are rusting or breaking
in half. The public, it appears, is
particularly disappointed in the famous chef Emeril, known for his exclamation
“BAM!” while cooking on his show. Martha
comes in for her share of blame, according to the Complaint, for claiming that
her knives truly hail from Solingen, and making a video stating that she has
“been using these knives forever.”

Trademark
counterfeiting, if proved, can be a “dicey” proposition for a defendant,
because statutory damages may be available.
In this case, the Chamber is seeking treble damages or, alternatively,
up to $2 million for each time Defendants have willfully counterfeited and infringed
the SOLINGEN® mark. So, any way you slice it, trademark
counterfeiting, if shown, can be a costly mistake for the defendant.

July 18, 2012

In our continued look at recent developments in the fantastic field of food, we report on this East meets West case involving two restaurants using similar names for their outsized sandwiches.

Defendant Heart Attack Grill (HAG) in Jack Lebewohl et al. v. Heart Attack Grill, LLC, is not exactly known for its low-cal menu. At its Las Vegas location, HAG serves up “Single”, “Double”, “Triple” and “Quadruple” Burgers, the latter clocking in at 8,000 calories, with four half pound beef patties. In fact, guests at HAG weighing 350 pounds or more eat free.

Plaintiff (the “Deli”) uses the name “Instant Heart Attack Sandwich” for two large potato pancakes enveloping corned beef, pastrami, turkey or salami -- a true delight for the deli aficionado -- and is also developing a “Triple Bypass Sandwich.” HAG, having palpitations when it heard this, sent a demand letter, telling the Deli to cease using these names because they caused confusion with HAG’s burger names. The Deli, a much beloved tourist attraction in New York, shot back with a declaratory judgment action, asking the court to state that the restaurants’ use of their sandwich names did not cause public confusion.

In considering this issue, the New York court discussed the multifactor standard for finding a likelihood of public confusion set out in the seminal case Polaroid Corp. v. Polarad Elecs. Corp.. Holding that most of the factors pointed against confusion, the court found no infringement, despite the use of “Heart Attack” in both names. Geographic remoteness was a factor, as was the difference in the types of customers that the parties served (the Deli’s health conscious consumers versus the caloric-loving populace that HAG serves). An absence of evidence that the public was actually confused between the parties’ names also figured in the decision. Indeed, HAG could have helped its case by commissioning a consumer survey, demonstrating that the public thought the sandwich names were somehow related, but HAG evidently chose not to do so.

The court concluded by -- appropriately -- “carving up” the areas in which the Deli could use the “Instant Heart Attack Sandwich” name: It could use this name within Manhattan, including on signage, menus and Internet advertising, but could not expand beyond Manhattan. As to the Triple Bypass Sandwich, the court granted the Deli’s motion that it could use this name, but only in a limited manner on menus (but not signage) pursuant to an agreement between the parties. According to the court, the parties could have saved themselves a lot of heartache -- and legal fees -- by negotiating on their own rather than coming to legal blows, because they wound up essentially where they began, especially as to the Triple Bypass Sandwich.

So, next time you bite into that pastrami on rye, realize that it might become the subject of a legal dispute.

April 20, 2012

The Fourth Circuit (Traxler, C.J.) has issued a unanimous decision in Rosetta Stone Ltd. v. Google Inc., No. 10-2007 (4th Cir. Apr. 9, 2012), overturning the Eastern District of Virginia’s opinion on several key grounds. The Fourth Circuit vacated the district court’s ruling of summary judgment against Rosetta Stone on several key points, remanding on each of these claims. The impact of the case upon retailers and consumers is yet to be seen, but the decision may result in decreased use of others’ trademarks in an advertiser’s Sponsored Links on Google and other search engine results (those shaded boxes, set off from the rest of the advertising, in search engine results).

Rosetta Stone is this country’s leading language software company. It sued Google in the Eastern District of Virginia, alleging among other things, direct and contributory trademark infringement, as well as trademark dilution. These claims arose out of Google’s sale of Rosetta Stone’s marks as “keywords” that third parties could purchase, triggering their advertisements when Internet users input Rosetta Stone’s marks into the Google search engine. With Google’s adoption of new policies in 2009, third parties were also allowed to use the keywords in their advertising text on Google in certain situations. According to Rosetta Stone, an increase in counterfeited software sales ensued. The district court granted Google’s motion for summary judgment on the claims we discuss here; the Fourth Circuit remanded.

Direct Infringement. The appellate court concluded that the district court erred in granting summary judgment on direct infringement. First, the Fourth Circuit stated that intent to cause consumer confusion could be found because Google knew that confusion was likely to result from the ways in which it was allowing keyword purchasers to use others’ trademarks in their ad text. Second, the Court accorded Rosetta Stone’s evidence of actual confusion -- in the form of both a survey finding 17% confusion and anecdotal evidence of purchasers buying counterfeit, faulty software sold by third parties via the Google search engine results -- great weight. And while few individuals testified as to their confusion, Rosetta Stone presented evidence of hundreds of customer complaints regarding pirated software they had purchased. The Court’s endorsement of this evidence is likely to be cited by future plaintiffs who can show many customer complaints, but only few witnesses willing or able to testify about confusion.

The Fourth Circuit also addressed, and refuted, the district court’s holding that Google’s activities were shielded by the “functionality” defense. The Fourth Circuit explained that the functionality doctrine prohibits acquisition of trade dress or trademark rights in functional features of a product or its packaging that are essential to the use or purpose of an item or affect its cost or quality. Focusing on their use in Google’s search engine, the district court concluded that the ROSETTA STONE® marks were functional because they had both “indexing” and “advertising” functions. Rejecting functionality as an affirmative defense here, the Fourth Circuit stated emphatically that the functionality doctrine did not apply because the district court erred in focusing “on whether Rosetta Stone’s mark made Google’s product more useful, neglecting to consider whether the mark was functional as Rosetta Stone used it.” Id. at 28. (Emphasis in the original.)

Dilution. The lower court had found no trademark dilution, a protection reserved for famous marks such as the COCA-COLAs or KODAKs of the world. The Fourth Circuit vacated and remanded on the dilution issue, finding a faux pas in the lower court’s reliance on Rosetta Stone’s increased brand awareness as a reason for rejecting its dilution claims. What this means is that a defendant trying to show that the plaintiff’s mark is “diluted” and therefore not famous cannot establish this simply by showing that the brand has increased in recognition.

February 23, 2012

Jeremy Lin’s surprising rise from the New York Knick’s bench to game winning starter has sparked “Linsanity” around the country, and spurred a race to the US Patent and Trademark Office (PTO) among entrepreneurs hoping to claim trademark rights in the catch phrase and cash in on the excitement. This race provides a cautionary tale for companies that may be sleeping on their own trademark rights.

Since the unexpected star was catapulted into the headlines, at least seven “Linsanity” trademarkapplications have been filed with the PTO, including one by Lin himself. But, Lin wasn’t the first. Prior to his application -- but only days after his rapid rise to fame began -- two individuals, apparently unrelated to Lin, applied to register “Linsanity” for use in connection with various items of athletic and other apparel. So is Lin out of luck? Possibly not. Although one of the applicants claims to already be using “Linsanity” (Lin’s application is based on his intended use of his name on products), a trademark application may be rejected if it falsely suggests a connection with a living person, or if the mark includes the name of a living person who has not given his consent. Just last month, the PTO cited both of these bases in an a letter requesting further information from an individual who had applied to register “Blue Ivy Carter NYC,” which the examining attorney determined the public would likely associate with Beyonce and Jay-Z’s famous baby of the same name. That application has since been abandoned.

As the Blue Ivy Carter letter shows, celebrities -- including those newly born or newly made -- have some arguments at their disposal to challenge another’s trademark application that are less likely to apply to the rest of us. If your company is currently using a mark, you should consider promptly applying to register it with the PTO to secure maximum rights. If you have developed a mark that you genuinely intend to use, even if you haven’t done so yet, you should also consider filing an intent-to-use application with the PTO. If the process is successful, it may prevent a potential headache down the road if your idea later becomes a trendy one.

February 13, 2012

By selling a product in a color that buyers associate uniquely with your company, you can gain a distinct advantage in the marketplace. This principle is not new. From light blue jewelry boxes (Tiffany) to canary yellow POST-IT® notes (3M), to pink fiberglass installation (Owens Corning), manufacturers have been creating single color brands for decades. The recent hubbub over Christian Louboutin’s claim to have the sole right to sellred-soled high fashion shoes has sparked anew interest in this subject. See Christian LouboutinS.A. v. Yves Saint Laurent America, Inc.

Here are some practical tips for a company that has its eye on that particular, unique color as its next brand:

Do not be too ambitious. The issue of whether part (rather than all) of a product that is a single color may constitute a brand is unsettled (Christian Louboutin). Select a complete product, in one unique color, and claim that as your own.

Make sure the color is consistent. If you sell a line of pink soaps, for example, make sure they are all the same shade of pink before claiming your pink brand.

Be prepared to show that the public associates the color exclusively with you or your product. Sales and advertising evidence emphasizing the color may be persuasive. If others are selling the same or closely similar products in the same color, this may doom your efforts. For instance, a “sea” of lemon yellow candy packages in the marketplace will not set you apart from other candy sellers.

Be prepared, if challenged, to offer a survey showing that purchasers identify your color exclusively with you or your product. A comprehensive survey should measure consumer recognition of your color against consumer recognition of other colors for the same product, all without any other source markings (such as brand names). This type of survey could be expensive, however, so even consumer statements without the aid of a formal survey could be useful.

Do not select a color that naturally results from the manufacturing process.

Choose a color that is not functional and does not give you an actual competitive advantage over others. If your competitors need to use the same color because it is essential to the use or purpose of the product, or affects its cost or quality, you cannot co-opt it as yours. See Qualitex Co. v. Jacobson Co. For example, no single company can claim rights in black for outboard boat motors, because black is compatible with many boat colors and will be attractive to multiple skippers. See British Seagull Ltd. v. Brunswick Corp.

Give your color a name. The “canary yellow” POST-IT® notes is a good example. Consumers will remember it and associate it with your company’s product.

January 10, 2012

In this third and final segment of our series, we suggest strategies that trademark owners may want to adopt and report on a recent development in the new top level domain scheme.

The launch of new top level domain names is right around the corner, on January 12, 2012. Trademark owners, particularly those that have developed significant goodwill in their brands, will be faced with several decisions. This blog briefly surveys those decision points. It also reports on an important letterpublished by the Department of Commerce (DOC) that may mirror some trademark owners’ concerns.

Do You Want to Register a New Top Level Domain in the System?

These are some of the factors that a company otherwise in a position to register a new gTLD (i.e., because it has the financial resources to do so) might consider:

Is the company’s brand name strong, and arbitrary or fanciful? If the company has a brand that it can protect under the trademark laws, it might simply object to any third party attempt to register its mark as a new gTLD, with some assurance that its objection will succeed.

Is the company’s name merely descriptive, or at most suggestive, so that the company should register the name as a new gTLD to keep others from doing so, if it wants to use the name in this capacity?

Does the company want to use the use its mark as a new gTLD for marketing purposes? Canon, for example, has announced its intent to register .canon and to issue second level domains to Canon customers who purchase cameras with unique chips so photos could be automatically uploaded to personal websites at [customer’s name].canon.

Apart from these issues, DOC’s letter raises a concern that may become widespread as the Internet opens up to new top level domains: Many trademark owners may feel compelled to file defensively at the top level, even if they are not going to use their top level domains, to prevent others from doing so. Of course, they will have an opportunity to object to third party attempts to register the same or confusingly similar letter strings as gTLDs. This, however, requires a trademark owner to be alert to the period for filing an objection, i.e., the period beginning approximately two weeks after the close of the application window on April 12, when ICANN posts the public portions of all applications that have been received on its website, and lasting for approximately seven months.

Should You Register Any Marks or Names as Second Level Domains?

Deciding whether you should register any marks or names as second level domains requires an in-depth familiarity with your organization’s portfolio. Some companies have dozens or even hundreds of trademarks, and will not wish to register all of them for cost and organizational reasons. A company may want to select (1) those marks that are its most valuable, and that it plans to continue using into the indefinite future or (2) any marks that it believes third parties will try to misappropriate.

Trademark owners must then submit evidence of their rights, of the sort we described in the second blog in this series, to the Trademark Clearinghouse. In addition, a rightful trademark owner may reserve its marks as second level domains with the new gTLD during the Sunrise Period, which will open at least 30 days before the launch of a new gTLD, ahead of others who might try to reserve the same names.

January 03, 2012

From celebrity misappropriation suits to blockbuster class action rulings in the Supreme Court, 2011 was another exciting year in consumer advertising law. As we look forward to 2012, here’s a look at eleven of the top stories from the year that was. If you have your own nominees for 2011’s top eleven, send an email (randal.shaheen@aporter.com) and we’ll try to post our readers' list later this month.

11. Maybe It’s Maybelline … or Maybe It’s Airbrushed

Beauty enhancements should come from products, not post-production! So said the UK’s Advertising Standard Authority in 2011, when it banned advertisements [Aug. 2, 2011] depicting Julia Roberts and Christy Turlington on the basis that the images had been digitally altered.

10. 2011.xxx

Many a legitimate enterprise found itself registering a .xxx domain name in 2011, as a new top level domain was launched for adult content on the Internet. These companies blushingly took advantage of the Sunrise B[Oct. 11, 2011] time period during which non-adult-industry trademark owners could defensively register their marks, thereby eliminating them from the pool of available .xxx domains.

9. There’s No Such Thing as a Free Lunch

It seems like the battle against the bulge is never-ending and so is the FTC’s battle against companies advertising misleading weight loss remedies. In 2011 the FTC reached a $25 million settlement[Oct. 4, 2011] with Reebok over ads for toning shoes that promised “a better butt and better legs with every step.”

8. She Looks Like Kim Kardashian

It’s well known that misappropriation suits are de rigueur for any self-respecting celebrity du jour. See e.g., Paris Hilton’s 2009 suit against Hallmark (for use of the phrase “that’s hot”); Lindsay Lohan’s 2010 suit against E*Trade (for portraying a baby named Lindsay as a “milkaholic”). 2011 was no exception, as Kim Kardashian sued Old Navy[Aug. 4, 2011] for allegedly using a model resembling her in a TV advertisement.

7. Made in Havana, Puerto Rico

The rule that literally true statements can be challenged as impliedly false took a hit this year[Oct. 10, 2011] when the Third Circuit held that survey evidence showing that the name “Havana Rum” gave the impression the rum was made in Cuba could be excluded because the statement on the bottle that the rum was “made in Puerto Rico” was objectively verifiable.

6. The Meaning of “Natural”

The trickle of cases alleging deceptive use of the term “natural” on labeling or in advertisements became a torrent in 2011, with new suits[Oct. 3, 2011] against Conagra, Kellogg, and Skinny Girl, to name just a few.

5.Protecting Children in the US -- Standards for Food Advertising

We have been following FTC efforts to establish principles for marketing food to childrenfor some time. In 2011, these efforts culminated in initial recommendations[May 16, 2011] published by the Interagency Working Group on Food Marketed to Children.These recommendations met with heavy resistance in the form of an industry coalition, [Aug. 9, 2011] which is seeking legislative action on the basis that the proposed standards are overbroad and anti-business.

4. Protecting Children in the UK -- Standards for Decency

The UK advertising regulator, the Advertising Standards Authority, was also active in protecting children in 2011, finding ad campaignsdirected at children[Oct. 24, 2011] or portraying children (here and here) [Aug. 18 and Dec. 19, 2011] to violate UK standards for responsible advertising.

3.COPPA

The FTC proposed changes[Sept. 23, 2011] to rules implementing the Children’s Online Privacy Protection Act (COPPA), which provides parents control over what personal information web sites may collect from children under 13 years old. These proposals are significant, particularly because FTC enforcement has made COPPA compliance a serious consideration[Nov. 23, 2011] for all web site operators.

2. Concepcion

In AT&T Mobility LLC v. Concepcion[May 4, 2011], the Supreme Court held that arbitration provisions prohibiting class-wide arbitrations can be enforced, and that the California Supreme Court’s decision in Discover Bank finding such provisions unenforceable is preempted by the Federal Arbitration Act. The full ramifications of Concepcion have yet to play out, but at least one court has found that such clauses can still be unconscionable. [Nov. 14, 2011]

1. Wal-Mart v. Dukes

The top spot on our list goes to the Supreme Court’s watershed decision[June 28, 2011] on class certification, the first of its kind in many years. Wal-Mart embraces a rigorous analysis of the elements of class certification, and substantially raises the bar for showing that the commonality element of Rule 23 has been met. Commentators were quick to predict that Wal-Mart would shape class action law for years to come, and early indications[Aug. 24, 2011] suggest that might be an understatement. [Nov. 15, 2011]

December 23, 2011

In this second segment of our series, we discuss options for trademark owners on how to act defensively if they do not become registries under the new top level domain system.

The first blog in this series explained how the opening up of the Internet to new registries -- and the potential explosion of new top level domains -- could change the Internet. Yet many, if not most, trademark owners will not become a registry with their own top level domains, for financial, technical or other reasons. These trademark owners, however, should know how to protect their trademark rights from the new form of cyberpirates that is likely to emerge. This blog briefly describes the more important mechanisms that ICANN plans to offer savvy trademark owners to protect their rights.

Objecting to a Third Party’s New gTLD Application

Only four grounds may form the basis for a trademark owner’s objection to a new gTLD application:

String Confusion Objection: The applicant’s proposed gTLD “string” of letters, is confusingly similar to a pre-existing gTLD or another applied-for gTLD string in the same round of applications.

Legal Rights Objection: The applicant’s gTLD string infringes the legal rights of the objector, such as the objector’s trademark rights. Factors in deciding a legal rights objection are similar to those in the Uniform Domain-Name Dispute Resolution Policy under current practice.

Limited Public Interest Objection: The applicant’s gTLD contravenes generally accepted standards of morality and public order under international law.

Community Objection: A significant part of the community, such as a geographic community, objects to the gTLD application, e.g., New York City residents might object to a Miami company’s submission for a .nyc registry.

To initiate a proceeding, the objector must file its complaint by a posted deadline with an appropriate Dispute Resolution Service Provider (DRSP), along with a specified fee. For many companies, the most relevant DRSPs are the World Intellectual Property Organization (for legal rights objections) and the International Centre for Dispute Resolution (for string confusion objections).

Protecting Against Infringing Second Level Domains in the New Domain Name Space

ICANN’s program contemplates important measures to protect trademark owners from the registration of second level domains, combined with the new gTLDs, by trademark infringers. Thus, a company owning the ABC® mark could invoke the procedures described below to prevent a third party from registering “ABC.new TLD” or to learn of such registrations.

The Trademark Clearinghous.ICANN plans to create a Trademark Clearinghouse, i.e., a central database for information about trademark rights. Trademark owners who want to register their second level domains with the new registry ahead of the general public, and trademark owners who want to be notified if a would-be infringer registers their trademarks as second level domains, must submit evidence of their trademark rights to the Trademark Clearinghouse. This evidence may consist of: a trademark registration; a judicial decision recognizing the trademark; or other evidence showing that the mark “constitute[s] intellectual property”. This Clearinghouse will authenticate information about the trademarks it receives and store that information in its database. It will provide information about the authenticity of the trademarks in its database, as needed, to new gTLD registries for use in the Sunrise Service and Trademark Claims Services described below.

Sunrise Service. New gTLD registries must provide a Sunrise Service that protects trademark owners from a “race to registration” against domain name registrants who might infringe the trademark owners’ rights. The anticipated sunrise period will be at least 30 days before the launch of a new gTLD, during which time a rightful trademark owner may reserve its mark as a second level domain with the new gTLD, ahead of others who might try to reserve the same name. For example, if a major car manufacturer could register its MERCEDES® mark as “mercedes.car” before Company S permits the public to register domain names in the .car gTLD.

Trademark Claims Service. In addition, all new gTLD registries must provide a Trademark Claims Service for the first 60 days after the public launch of their new gTLDs, i.e., after the general public can begin registering domain names in the gTLDs. This service provides a warning notice, called the Trademarks Claim Notice, to prospective registrants of a pre-existing trademark owner’s rights when the domain name applicant attempts to register a domain name that is an “identical match” to the trademark that the trademark owner has listed with the Trademark Clearinghouse. This notice, however, is of limited utility, because it is only triggered when a third party tries to register a second level domain identical to a trademark that resides in the Trademark Clearinghouse. If the domain name registrant proceeds with the registration application, the trademark owner will receive a notice informing it that a domain name that is an identical match to the trademark owner’s mark has been registered.

Objections to Registrations. The Uniform Dispute Resolution Procedure that currently applies to disputes involving registration of second level domains with .com, .net, .org and certain other top level domains will apply to registration of second level domains with the new gTLDs. An entity that wants to challenge registration of a second level domain with a new gTLD may, assuming jurisdiction and venue lie, also file a lawsuit in the United States alleging infringement, cybersquatting and related causes of action.

December 20, 2011

Most of you are probably familiar with the common Internet domain name endings such as “.com”, “.net”, or “.org”, which, when combined with an organization’s or individual’s name, serve as addresses for websites in cyberspace (e.g., “microsoft.com”). The portion to the right of the dot is the Top-Level domain (“TLD”). One type of TLD is a “generic” TLD (gTLD), such as .com; another is a “cc TLD” or country code, such as “.jp.” . The portion to the left of the dot is called a “second-level domain name” and is the name of the organization or individual. To date, only 22 gTLDs exist. Beginning on January 12, 2012, however, the Internet will open up to a potentially infinite number of new top level domains or “gTLDs”. This Blog briefly explores how the launch of these new top level domains could change the Internet -- and affect your organization -- dramatically.

What will the changes look like? The launch of new gTLDs means that anyone with the means can become a “registry” that creates and manages a database of domains ending with a particular top level domain that it selects. That new gTLD can be a generic term (e.g., “.bank”, “.wine”) or a brand name (e.g., “.canon”, “.nokia”). The registry should have a say in setting the rules for entities eligible to register under that gTLD. For example, if the gTLD is a generic term such as “.bank”, the registry may require that registrants actually offer banking services. If the registry is a car manufacturer using its brand name as the gTLD (e.g., “.mercedes”), it may require that only authorized dealers can register in its gTLD space (e.g., “manhattandealer.mercedes”). Still other registries might use the new gTLDs for creative promotional purposes. The camera company Canon was the first to express an interest in setting up a new registry, under .canon. The company may use “.canon” for marketing purposes, issuing second level domain names to Canon camera owners and embedding a unique chip in the buyers’ cameras so that they could upload photos onto [buyer’s name].canon.

The registry will set the rules for bodies called “registrars”, which are accredited by the Internet Corporation for Assigned Names and Numbers, the global body that governs the Internet. The registrars will, in turn, sell to individual registrants the right to combine their second level names with the top level domain for a limited period of time.

How does one become a Registry? The requirements are rigorous, and include a significant financial payment ($185,000), a demonstration of financial stability, and sophisticated technical support on a 24/7 basis. If a Registry elects to outsource its technical work, its financial commitment could run $1 million or more. Applicants must complete a 40+ page application and 10 detailed specifications demonstrating their financial and technical capability. ICANN is not planning to post the actual new GTLD application. This link, here, will allow an Internet visitor to navigate through the application process. ICANN will evaluate the applications. Among other things, it will guard against the granting of multiple new gTLDs that are confusingly similar to a previous gTLD. The application window lasts for only four months, from January 12, 2012 to April 12, 2012.

What to watch out for if you are not a Registry: Becoming a Registry is not for everyone. Some organizations do not have the expertise or the financial wherewithal, or want to make the commitment required. Still others, such as non-commercial entities that do not sell products or services, might not stand to gain by carving out a space they can control to some degree on the Internet.

If you are not in the “Registry Game”, you should be prepared to act defensively to:

Object to a third party’s proposed gTLD that incorporates your trademark; or

Object to a third party’s attempt to register second level domains incorporating your name or trademark within the new gTLD space.

The next blog post in this series will describe these defensive mechanisms and explains how they work. The third and final post will sum up the new gTLD process and suggests strategies for an organization to adopt as the launch date approaches.

October 11, 2011

The new .XXX top level domain was recently launched as the space for adult content on the Internet (e.g., PLAYBOY.XXX). But this is also an invitation for third party cybersquatters to register in the .XXX space. To guard against this danger, the registry managing the launch is allowing legitimate brand owners a limited window for “reserving” their brand names together with .XXX before these names become generally available. The reservation process, as described below, is quick and relatively easy, but trademark owners should capitalize on it soon to avoid an association between their brands and the adult entertainment industry.

The .XXX launch, which is managed by ICM Registry, LLC (“ICM”), includes three phases: Sunrise, Land Rush, and General Availability. Sunrise, which began on September 7, 2011, is a limited period during which members of the adult entertainment industry may register .XXX domain names corresponding to their registered trademarks (Sunrise A), and non-industry trademark owners may defensively register their marks (Sunrise B), eliminating them from the pool of available .XXX domains. The Sunrise period ends October 28, 2011, and when Land Rush begins on November 9, 2011, members of the adult entertainment industry may reserve .XXX domain names regardless of trademark ownership.

To obtain a Sunrise B defensive registration, trademark owners must apply to ICM through an Accredited Registrar. Each Registrar sets its own one-time fee for Sunrise B applications, with most charging between $200-$300. Importantly, only a registered trade or service mark of national effect may be the basis for Sunrise B defensive registration; Sunrise B is not available for unregistered marks, or those that are merely state registered. Further, only registrations issued before September 1, 2011 qualify for Sunrise B.

September 28, 2011

Google might not fare so well in the recent appeal before the US Court of Appeals for the Fourth Circuit brought by Rosetta Stone, the internationally-known language learning company. In Rosetta Stone Ltd. v. Google Inc., the Fourth Circuit considered a host of IP issues raised by the language learning company involving Google’s sale of Rosetta Stone’s trademarks as keywords. This case is made all the more interesting by the district court’s unusual and (in the authors’ view) misguided interpretation of the trademark and dilution laws. (In full disclosure, the authors represented more than a dozen major brand owners, among them Coach, The Professional Golfers’ Association of America, and Rolls Royce, as amici curiae who urged reversal of the lower court’s opinion on the issues of trademark functionality and dilution.)

On summary judgment, the district court had ruled in favor of Google on all counts. But this ruling might well be overturned on appeal. The difficulty, from Google’s perspective, is that the district judge misapplied the law in some instances and went out on a limb in others, deciding issues in a novel and unsupported way. And this was not lost on the panel.

August 30, 2011

Earlier this month, in two separate decisions, the Ninth Circuit joined the growing number of appellate courts in rejecting the long-standing presumption of irreparable harm in determining whether a preliminary injunction should issue in intellectual property cases. First, on August 3, 2011, the Court rejected the presumption for copyright cases in Perfect 10 v. Google. And on August 22, 2011, the Ninth Circuit followed up with an opinion rejecting the presumption of irreparable harm in trademark cases in Flexible Lifeline v. Precision Lift. These opinions likely will have a substantial impact on plaintiffs’ ability to obtain preliminary injunctive relief in copyright and trademark cases, as irreparable harm must now be demonstrated and not merely presumed upon a showing of likelihood of success on the merits.

This sea change in preliminary injunction standards has been developing for some time. In 2006, the Supreme Court, in eBay, Inc. v. MercExchange, L.L.C., held that irreparable harm could not be presumed when determining whether permanent injunctive relief should be granted in patent infringement cases. Since ebay was decided, appellate and district courts have struggled with the question of whether eBay’s prohibition on the presumption of harm applies in copyright or trademark cases, in particular when the plaintiff is seeking preliminary relief. While many courts have continued to enter preliminary injunctions based on a finding that the plaintiff is likely to succeed on the merits followed by a presumption of irreparable harm, there has been a growing shift away from this approach. In Perfect 10 v. Google and Flexible Lifeline v. Precision Lift, the Ninth Circuit became the latest court to join this movement. Resolving a split among district courts within its Circuit, the Ninth Circuit found that eBay’s rejection of the presumption of irreparable harm in patent cases applies equally to actions for copyright and trademark infringement and to requests for preliminary relief.

In light of the decisions in Perfect 10 v. Google and Flexible Lifeline v. Precision Lift, a plaintiff seeking injunctive relief in the Ninth Circuit will have to do more than show a likelihood of success on the merits of its claims and will need to demonstrate through evidence the existence of irreparable harm from ongoing copyright and trademark infringement.

March 28, 2011

The long-running dispute between the internationally-known lingerie retailer Victoria’s Secret and the small retailer Victor’s Little Secret has finally come to an end now that U.S. Supreme Court refused its certiorari request. Over a decade ago, Victoria’s Secret sued Victor and Cathy Mosely to stop them from using the names “Victor’s Secret” or “Victor’s Little Secret” for a store in Elizabethtown, Kentucky, which sold merchandise that included sex toys and other “adult” products.

During its first trip through the federal court system, the US Supreme Court famously ruled in Moseley v. V. Secret Catalog, Inc. (2003) that the Federal Trademark Dilution Act (FTDA) required a plaintiff (Victoria’s Secret) to prove that actual dilution had occurred to obtain an injunction under the FTDA. This result upset many trademark owners who complained that they should not have to wait until their famous trademarks had been weakened by third parties before obtaining relief. Responding to these widespread objections, Congress overruled the Supreme Court decision by passage of the Trademark Dilution Revision Act of 2006 (TDRA), decided while the Moseley was on remand to the district court.

The TDRA provides relief for two types of dilution: dilution by blurring or dilution by tarnishment. On remand, Victoria’s Secret sought an injunction against Victor’s Little Secret arguing that the small retailer tarnished the famous VICTORIA’S SECRET mark by associating it with sexually-oriented merchandise. Applying the new TDRA, the Moseley district court concluded that Victor’s Little Secret disparaged the VICTORIA’S SECRET mark and issued an injunction in favor of Victoria’s Secret. Moseley appealed to the Sixth Circuit. Upholding the district court’s injunction, the Sixth Circuit considered the proof necessary for a “dilution by tarnishment” claim under the new TDRA. Over a dissent, the Sixth Circuit found that the sex-related products sold by Victor’s Little Secret created a rebuttable presumption of dilution which shifts the evidentiary burden to the defendant to prove the absence of dilution, “if there is a clear semantic association between the two [trademarks].”

The court found support for its “semantic association” standard based on prior dilution decisions involving pornography websites or movies. Explaining the basis for its decision, the Sixth Circuit stated:

"The new law seems designed to protect trademarks from any unfavorable sexual associations. Thus, any new mark with a lewd or offensive-to-some sexual association raises a strong inference of tarnishment. The inference must be overcome by evidence that rebuts the probability that some consumers will find the new mark both offensive and harmful to the reputation and favorable symbolism of the famous mark."

The Sixth Circuit held that the evidence to overcome this presumption could be expert testimony, surveys, polls, or customer testimony. Acknowledging that any tarnishment may be “speculative,” the court found that the Moseleys failed to present evidence to rebut the presumption of tarnishment. In a dissenting opinion, Sixth Circuit Judge Karen Nelson Moore focused on the speculative nature of the claim alleged by Victoria’s Secret and disagreed with the majority’s burden-shifting presumption based solely on the nature of the goods sold by Mosely. Perhaps heartened by the dissent, Moseley sought to challenge the Sixth Circuit’s “rebuttable presumption” standard before the Supreme Court. The Court’s denial of the petition for certiorari leaves this presumption the law in the Sixth Circuit. Whether or not other circuits will follow is yet to be seen.

March 04, 2011

On February 8, 2011, the Ninth Circuit joined the Second Circuit in deciding that, under the federal Trademark Dilution Revision Act of 2006 (TDRA), owners of famous trademark do not need to show that an allegedly dilutive mark is “identical,” “nearly identical,” “substantially similar,” or “essentially the same” as the famous mark to demonstrate dilution under the TDRA. Instead, in Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., the Ninth Circuit, like the Second Circuit in Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., concluded that its prior precedent requiring that the marks at issue be “identical or nearly identical” does not survive the plain language of Congress's 2006 TDRA, which amended Section 43(c) of the Lanham Act.

In its decision, the Ninth Circuit intricately traces the origin of its prior “identical or nearly identical” standard back to the Second Circuit’s decision in Mead Data Central, Inc. v. Toyota Motor Sales, U.S.A., Inc. Because the 2006 TDRA explicitly sets forth a number of elements that a court may consider in evaluating a dilution claim, of which the similarity of the marks is only one element, the Ninth Circuit held that the district court’s application of the incorrect “identical or nearly identical” standard was in error. Moreover, the Ninth Circuit concluded that this error permeated the entire decision, requiring a remand to the district court.

At the same time, the Ninth Circuit recognized that some degree of similarity must still be present for dilution to occur. The TDRA requires that a famous mark owner prove an “association arising from the similarity between a mark or trade name and a famous mark.” Not surprisingly, the appellate court observed that “[a] sufficiently strong showing of similarity can overcome all other relevant factors,” and “greater degrees of similarity manifestly are more likely to support a finding of dilution.” Although the Ninth Circuit held “that a particular degree of similarity is not a threshold,” it nonetheless recognized that “similarity is the necessary predicate for dilution analysis.”

Having conclusively retired the requirement that the dilutive mark be “nearly identical” to the famous mark, the Ninth and Second Circuits’ recent decisions open a new front at the opposite end of the similarity spectrum: When are marks so dissimilar that there can be no dilution as a matter of law? In Starbucks, the Second Circuit found that the district court did not err in concluding that the disputed marks “were minimally similar to the Starbucks Marks.” Yet, “the existence of some -- but not substantial -- similarity between the subject marks may be sufficient in some cases to demonstrate a likelihood of dilution . . . .” This “minimally similar” standard provides little guidance to courts and gives little comfort to defendants seeking to resolve a dilution claim early in a case. The Ninth Circuit’s decision offers little additional guidance:

The degree of similarity between the [parties’ marks] may be insufficient to support a likelihood of dilution, but that conclusion can come only after consideration of the degree of similarity in light of all other relevant factors and cannot be determined conclusively by application of an “essentially the same” threshold.

The federal dilution standards continue to evolve, but they have not become any clearer.

September 10, 2010

In a recent trademark infringement decision, the Ninth Circuit reaffirmed that issues of confusion, fair use and the weight to be given survey evidence are factual issues which are to be decided at trial. In Fortune Dynamic, Inc. v. Victoria’s Secret Stores Brand Management, Inc., No. 08-56291 (August 19, 2010), the Ninth Circuit reversed the district court’s entry of summary judgment in favor of defendant Victoria’s Secret, whose use of the stylized word DELICIOUS on tank tops was alleged to violate plaintiff’s DELICIOUS trademark. Holding that, “because of the intensely factual nature of trademark disputes, summary judgment is generally disfavored in the trademark arena,” the appellate court ordered the case be tried.

Plaintiff Fortune Dynamics owns a registered trademark for the DELICIOUS mark for women’s shoes, which are advertised in popular women’s fashion magazines. This dispute arose when Victoria’s Secret launched a promotional campaign for its Beauty Rush makeup. Without conducting a trademark search, Victoria’s Secret sold hot pink tank tops with the word DELICIOUS in silver lettering across the front. Fortune Dynamics alleged the use of its DELICIOUS mark on Victoria’s Secret tanks constituted trademark infringement.

The district court granted summary judgment for Victoria’s Secret, “holding that the factors used to determine whether there is a likelihood of confusion weighed” in favor of defendant, and that Fortune’s claims were “entirely barred by the fair use defense.” The district court also excluded Fortune’s trademark expert, including his confusion survey.

Last month, the Ninth Circuit reversed and remanded the case for trial, reiterating several times that the district court improperly decided issues of fact that are the province of the jury. The appellate court carefully analyzed the relevant legal issues, identifying the factual issues that must be reserved for the jury. On the question of likelihood of confusion, the Ninth Circuit reviewed many of the relevant factors and determined that a reasonable jury could come out either way on each of them. For example, Victoria’s Secret had argued that confusion was unlikely because the tank top was sold only in Victoria’s Secret stores, which sells only Victoria’s Secret merchandise. The appellate court observed that post-sale confusion was within the scope of the Lanham Act and was relevant in this case when the tank top was observed being worn outside of Victoria’s Secret stores.

With regard to plaintiff’s trademark expert and his survey, the appellate court acknowledged the alleged shortcomings in the survey and the court’s role as a gatekeeper with respect to expert evidence. Nonetheless, the Ninth Circuit held that the “side-by-side,” internet survey of prospective purchasers met the basic standards of acceptable survey techniques and, thus, should be admitted. Critiques of the survey went to the “weight” of the survey to be determined by the jury.

Finally, Victoria’s Secret argued that its use of “DELICIOUS” on a tank top was a descriptive use of the word and not a trademark use prohibited by the Lanham Act. See 15 U.S.C. § 1115(b)(4). Victoria’s Secret witnesses had testified that the DELICIOUS word was selected for non-trademark purposes: (1) “delicious” “accurately described the taste of the BEAUTY RUSH lip glosses and the smell of the BEAUTY RUSH body care”; and/or (2) “the word served as a ‘playful self-descriptor,’ as if the woman wearing the top is saying, ‘I’m delicious.’” Finding an issue of disputed fact, the Ninth Circuit noted that there was contrary evidence which a reasonable jury could conclude proved that Victoria’s Secret was using DELICIOUS as a trademark. In fact, Victoria’s Secret’s own use of its trademarks on clothing was significant to the court:

Perhaps most important, Victoria’s Secret’s used “Delicious” in a remarkably similar way to how it uses two of its own trademarks — PINK and VERY SEXY. PINK is written in bold capital letters on different items of Victoria’s Secret clothing, while VERY SEXY was written, in hot pink crystals, across the chest of a similar black-ribbed tank top during a very similar promotion. The fact that Victoria’s Secret used “Delicious” in the same way that it uses other Victoria’s Secret trademarks could be persuasive evidence to a jury that Victoria’s Secret used, or at least intended to establish, “Delicious” as a trademark.

The appellate court concluded that a jury must decide these issues, not the district court.

Although both plaintiffs and defendants frequently obtain summary judgment orders from federal courts, this case serves as a good reminder that factual issues are the purview of the jury. The jury must decide questions about the context and uses of trademarks even though the evidence appears to favor one side. When a trademark plaintiff presents admissible evidence on issues such as likelihood of confusion and descriptiveness, the jury and not the judge must weigh it.

September 08, 2010

In a much anticipated decision, the Court of Appeals for the Federal Circuit recently held in Stauffer v. Brooks Brothers, Inc., that “any person” has standing to bring a false patent marking action, regardless of whether or not that individual suffered any personal harm and without any allegation of competitive harm to the marketplace from the false marking. The Stauffer case has been closely watched by legal observers, and several false marking cases have been stayed pending the decision. The Federal Circuit’s holding places essentially no standing limitation on a person’s right to sue for false patent marking, and potentially opens the door to even more false marking litigation.

In Stauffer, a patent attorney acting on his own behalf sued Brooks Brothers for selling bow ties containing adjustment mechanisms that were marked with two patents that had been expired for over fifty years. Stauffer argued that continuing to mark the ties with expired patent numbers constituted false patent marking in violation of the false marking statute. Brooks Brothers moved to dismiss Stauffer’s complaint for lack of standing and for failure to allege an intent to deceive the public with sufficient specificity to meet the heightened pleading requirements for claims of fraud. The district court held that Stauffer did lack standing to assert a false marking claim because he had not sufficiently alleged an injury in fact to the United States or to himself.

The Federal Circuit reversed. According to the Court, in order to have standing, Stauffer was required to allege that the United States suffered an injury in fact causally connected to Brooks Brothers’ conduct. That requirement was met because Congress’ decision to enact § 292 reflected its determination that deceptive patent mismarking is harmful and should be prohibited, and a violation of § 292 inherently constitutes an injury to the United States. Because the government would have standing to enforce its own law, Stauffer, as the government’s assignee, also had standing to enforce § 292, even if Stauffer himself had not suffered a concrete injury. The court found that either a proprietary or sovereign (i.e., the government’s right to enforce its own laws) injury of the United States conferred standing on the government, and therefore Stauffer.

The Federal Circuit’s decision removes a potential standing defense to false marking claims, if not overturned by Supreme Court review or congressional action.. At the same time, however, the Court hinted at other potential defenses to such a claim. First, in Stauffer, an amici asserted [insert brief if libref finds] that the government’s assignment of a false marking claim without retaining control over the assignee’s actions violated the “take Care” clause of Article II, § 3 of the Constitution. The Federal Circuit noted that Ciba raised “relevant points” but expressly declined to decide the constitutionality of § 292 because the issue had not been raised or argued by the parties. The constitutionality of the false marking statute may well be the next battleground in such cases. Second, the court remanded the case to the district court with instructions to consider the merits of Stauffer’s case, including Brooks Brothers’ motion to dismiss pursuant to Rule 12(b)(6) “that the complaint fails to state a plausible claim to relief because it fails to allege an intent to deceive the public with sufficient specificity to meet the heightened pleading requirements for claims of fraud imposed by” Rule 9(b). It may be exceedingly difficult for false marking plaintiffs to meet that burden. Indeed, at least one district court has already dismissed two false marking suits on this basis.

July 26, 2010

If you’ve ever wondered what to do with your old cell phone or laptop, you’re not alone. According to the Basel Action Network (BAN), a Seattle-based non-profit, “e-waste” is the fastest growing toxic waste stream in the world, and too much of it is currently being dumped, burned, or exported to less developed countries that lack the technologies needed to manage toxic materials without harming human health and the environment. In April, BAN launched its e-Stewards® Certification program, which allows individuals and organizations to identify recyclers that comply with BAN’s standards for the handling, recycling, and reuse of electronic waste. In connection with the program, BAN wants to use the phrases “electronics recycler,” “certified recycler,” and “certified electronics recycler” to describe those recyclers who have obtained e-Stewards® status. The problem? The phrase “Certified Electronics Recycler” has been registered as a certification trademark by another non-profit that claims to certify recyclers. On June 7, BAN sued the International Association of Electronics Recyclers, Inc. (IAER) and its successor, the Institute of Scrap Recycling Industries, Inc. (ISRI), for cancellation of the Certified Electronics Recycler® certification mark and for a judicial declaration that BAN’s use of the phrase does not constitute trademark infringement. (BAN originally petitioned the U.S. Patent & Trademark Office to cancel the Certified Electronics Recycler® mark but recently opted to pursue a federal court complaint instead.)

In its Complaint, BAN alleges the phrase “electronics recycler” is a generic phrase which is a commonly used industry term to describe an entity that recycles electronic equipment or parts, and that “certified electronics recycler” is commonly used to describe an electronics recycler that has been certified or accredited by a private or public standards-setting organization. The continued use and registration of the Certified Electronics Recycler® certification mark, BAN argues, erroneously suggests that only ISRI can certify a genuine “certified electronics recycler,” which harms BAN, its e-Stewards program, and the public. Second, BAN alleges defendants have abandoned the IAER certification standards, which were originally associated with defendants’ certification mark, and are currently misusing the mark in connection with a different set of standards adopted by ISRI. BAN argues that because the certification mark “Certified Electronics Recycler” has not been used consistently with one set of consistent standards, the use of the phrase as a certification mark is inherently misleading and confusing to the consumer, and should be cancelled under the Lanham Act’s trademark cancellation provisions.

The amount of electronics waste expected to increase 8% per year (according to BAN). At the same time, there is an increased desire by all of us who want to upgrade our cell phones and laptops in an environmentally responsible way and the government that we dispose of this waste in an appropriate manner. If one company or organization can claim ownership and rights to the Certified Electronics Recycler® mark, will that organization have a competitive advantage over other standards-setting organizations in certifying electronics recycling companies? The federal court in Seattle, Washington is currently poised to answer this question.